US plans $100 million push to keep China out of Pakistan's backyard

Pakistan PM Shehbaz Sharif

US has proposed a budget of $101 for Pakistan as part of its effort to wean Islamabad away from all-weather ally China's influence.

US assistant secretary of state Donald Lu told a congressional panel on Tuesday that the allocation will be used to strengthen democracy, fight terrorism, stabilise the country’s economy and prevent Pakistan's reliance of China in FY25.

The explicit mention of China comes at a time when Pakistan is struggling with mounting foreign debt, most of which is owed to Beijing.

According to a report in 2023, Pakistan owes one-third of its $125 billion debt to China alone.

Dawn reported that the US budget document seeks a total of $1.01 billion in foreign assistance for the South and Central Asia region to “compete with the People’s Republic of China (PRC), counter Russian and Chinese disinformation, and prevent terrorist groups from threatening the US security”.

Lu said that US wants to prevent Islamabad's "further overreliance" on Beijing. “China is the past in terms of investment; we are the future,” he added.

The Biden administration official said that US has been struggling to compete with China in the region, with Beijing expanding its military and commercial foothold in the Indo-Pacific.

A study in 2023 revealed that Pakistan is the third largest beneficiary of Chinese development finance worldwide with a staggering portfolio of $70.3 billion.

The China Pakistan Economic Corridor, or CPEC, is part of the China's flagship Belt & Road Initiative. However, several reports have indicated that multiple billion-dollar projects under CPEC have been hanging fire.

Notably, in 2018, then US President Donald Trump had cancelled $1.3 billion in aid to Pakistan and denounced it for not doing enough to end terror emanating from its soil. Ties between the two countries had plunged further after Trump's decision.